Star VCs Invest Millions In A Startup That Will Change How You Pay Your Phone Bill

NEW YORK (Reuters)
- Andreessen
Horowitz is leading a $15.5 million round of venture funding
for ItsOn Inc, a developer of software that supports more
flexible mobile billing options like sponsored data services and
split billing for work and personal use.

ItsOn, which has had funding from Verizon
Communications, Vodafone
Group Plc and Best Buy
in the past, said its technology will power a new service for one
of the top three U.S. mobile providers starting in early 2013.

Silver Lake AG and SV Angel
are also providing funding for ItsOn in the current round but the
majority is from Andreessen Horowitz, according to its founder
Marc
Andreessen. ItsOn was co-founded four years ago by former
Cisco
Systems Inc executive Charlie Giancarlo and Greg Raleigh, whose
company Airgo Networks was bought by Qualcomm
Inc in 2006.

ItsOn's offering includes software that is installed on both
mobile devices such as smartphones and on remote servers
connected to the wireless service provider's network.

The company's idea is that consumers would be able to use the
smartphone software to easily make changes in their service plan
without having to call customer services.

As consumers use more and more mobile data services on devices
such as smartphones and tablet computers, they are increasingly
wary of how much they use since U.S. operators Verizon Wireless
and AT&T Inc have moved from unlimited use plans and now
charge based on how much data customers use.

The ItsOn software also allows the network operator to track data
consumption on each device so it can suggest a different service
option in cases where a user has a data plan that allows for well
above or below the usage, the company said.

Mobile operators typically have a set number of price options
they can offer customers as it takes time to introduce a new
service plan.

But with the ItsOn system they can offer far more options and
allow consumers to change them more easily, according to the
company and its backers.

"This is a much more advanced way to do usage based pricing,"
said Marc Andreessen, noting that carriers now depend on "very
crude pricing plans."

Customers who use the same device for business and pleasure could
also get separate bills by using the new software, Raleigh said.
Both AT&T and Verizon Wireless have talked about the
possibility of offering sponsored data connections but neither
has said when such services would be available.

Raleigh declined to comment on which carriers and what types of
services his software would support first.